BERKELEY – In a recent Vox essay outlining my thinking about US President Donald Trump’s emerging trade policy, I pointed out that a “bad” trade deal such as the North American Free Trade Agreement is responsible for only a vanishingly small fraction of lost US manufacturing jobs over the past 30 years. Just 0.1 percentage points of the 21.4 percentage-point decline in the employment share of manufacturing during this period is attributable to NAFTA, which was enacted in December 1993.

A half-century ago, the US economy supplied an abundance of manufacturing jobs to a workforce that was well equipped to fill them. Today, many of those opportunities have dried up. This is undoubtedly a significant problem; but anyone who claims that the collapse of US manufacturing employment resulted from “bad” trade deals is playing the fool.

The facts about the declining US manufacturing employment are plain; there are no “alternatives.”

The primary culprits are productivity growth and limited demand, which cut the share of nonfarm employees in manufacturing from 30% in the 1960s to 12% a generation later. That share fell further, to 9% because of misguided macroeconomic policies, especially during the Reagan era, when deficit spending and overly tight monetary policy caused the dollar to soar, undermining competitiveness.

After this period, the US abdicated its proper role as a net exporter of capital and finance, and less developed economies became net sources of investment funds. Finally, China’s extraordinarily rapid rise pushed the employment share of manufacturing down to 8.7%; NAFTA took it to 8.6%.

I had promised Vox’s editor-in-chief, Ezra Klein, a 5,000-word essay on this topic by late September.

I ended up delivering 8,000 words in late January, but the essay still didn’t accomplish everything I had wanted it to. Briefly, I argued that “bad” trade deals are irrelevant to the problem of diminishing economic opportunities, and I outlined how American trade – in fact, industrial – policy should address manufacturing.

I also tried to explain why certain cohorts, from both the left and the right, have long fixated on trade.

In fact, as far back as 1993, I have been asking union leaders, members of Congress, and lobbyists who have opposed trade deals why they do not expend the same level of energy on other important issues – including many where common ground could easily be found.

This intransigent opposition remains a mystery to me to this day. The best partial explanation that I have seen starts with the philosopher Ernest Gellner’s cruel observation about left-wing academics.

According to Gellner, history blew past them when the politics of nationalism and ethnicity began to crowd out political-organizing efforts centered on class. Politicians seeking to harness populist energy do so by stoking animus toward foreigners, supping with the devil with a very short spoon.

But, again, this is only a partial, and ultimately inadequate, explanation.

As for industrial policy, the economist Stephen S. Cohen and I argue in our 2016 book, Concrete Economics, that officials should recognize and capitalize on America’s interlinked communities of producers and their deep institutional knowledge of engineering practices.

What’s more, the US should start doing what rich countries are supposed to do: exporting capital and running a trade surplus to fund industrialization in underdeveloped parts of the world.

As Harvard University’s Larry Summers and Barry Eichengreen of the University of California at Berkeley, have observed, it is almost as if Trump’s economic strategy – if one can call his vague and vacillating statements that – has been designed to reduce manufacturing employment in America further. Trump’s policy priorities – fiscal stimulus, corporate tax cuts, possibly a “border adjustment” tax on imports, pressuring the Federal Reserve to raise interest rates – will only strengthen the dollar.

And that sends a clear message to domestic manufacturers: you are not wanted.

Of course, Trump will not blame his own incoherent and counterproductive policies for a stronger dollar. He will blame China and Mexico – and he will not be alone. In the US today, some on the left are just as keen as Trump to blame Mexico for the entire decline in manufacturing employment over the past three decades.

That is a big problem for the US and the world. Given the chauvinist politics that often accompany protectionism – and that are a mainstay of Trump’s brand – one might even say that it is a “bigly” problem.

- Proposals for tax reform and a new healthcare plan have led to a surge in consumer confidence.- A subsequent rise in investor sentiment has lifted the stock market to new all-time highs.- Yet there is a massive disconnect between expectations and the fiscal reality, which will have significant ramifications for the economy and markets.

Under the guise that history repeats itself or at least rhymes, let me share with you the picture below, which hangs framed in my office. It is a full-page cartoon from an 1899 original edition of Puck magazine, which I understand was similar to "The Daily Show" today. The reason that this picture resonates with me now has as much to do with the characters in the cartoon as it does with the caption beneath it. It is titled, "The Fool and His Money." Don't jump to conclusions about who the fool might be today, as I think that has yet to be determined.

The caption beneath the title is a quote from John W. Griggs, who was U.S. Attorney General at that time. He states that "with reference to these large combinations of capital which are now forming, my own judgment is that the danger is not so much to the community at large as it is to the people who are induced to put their money into the purchase of stock." The cartoon depicts elated investors eagerly throwing their money at a stock-peddling promoter, who smiles as he sits atop a ticker tape machine.

I shared this picture in one of my previous writings, in which I compared the stock promoter to the Federal Reserve, inducing investors to buy risky assets with its zero-interest-rate policy. P

erhaps that comparison is still valid today, considering the Fed's unwillingness to raise interest rates any further, despite professing that our economy has near-fully healed.

What I see in this picture today is a new administration that sits atop Washington, but instead of promoting outsized gains on risky financial assets to individual investors, it is promising economic benefits in the form of tax cuts and a new healthcare plan to middle-class Americans.

In turn, the American public is throwing its vote of confidence behind this administration in expectation that it will receive these benefits, and the investing public is following by propelling the stock market (NYSEARCA:SPY) to new all-time highs.

I was very enthused to hear President Trump proclaim that there would be "massive tax cuts for the middle class," as recently as this week during one of his press conferences. I've also been encouraged by Trump's assertion that the Obamacare replacement will "take care of everybody," and that it will do so for less money. He stated that we "can expect to have great healthcare. It will be in a much simplified form, much less expensive and much better." These would both be extremely positive developments for the economy and the market and the majority of Americans are clearly taking him at his word.

Consumer Confidence

We have seen a surge in consumer confidence since the presidential election. According to the University of Michigan's survey, consumers "anticipated the most positive outlook for their personal finances in more than a decade." It was also noted that this elation was "based on political promises, and not, as yet, on economic outcomes." The Conference Board's survey revealed similar results, but what was notable in its report was that the greatest surge in confidence came from the income level of $35-50K, which constitutes a large segment of the middle class. A thriving middle class is a critical component to a strengthening economy that has sustainable growth.

Investor Sentiment

Investors have responded to the President's proposed agenda and the surge in consumer confidence that followed, by lifting the stock market to new all-time highs. There is so much enthusiasm that short-sellers have deserted the marketplace. This is a complete reversal from where we stood nearly one year ago.

Additionally, speculators are using call options to bet on a continued rise in the S&P 500 index relative to the number of put options being used to make bearish bets at a rate not seen since 2009. In other words, the number of bearish bets being made on the S&P 500 index relative to the number of bullish bets has fallen to a level seen only after the tech bubble burst in 2000 and at the height of the financial crisis in 2008. Yet, the market was bottoming during those periods, whereas it is at all-time highs today.

This put-call ratio could be interpreted as either an extremely bullish sign, based on historical precedent, or as extremely bearish, considering that we are at the opposite end of the spectrum today in terms of the valuation of the S&P 500 index, as well as the stage of the business cycle.

What is clear is that very few investors are concerned about downside risk at this point. I think that what transpires moving forward will depend on whether or not the surge in confidence for the vast majority of American households is validated by legislative outcomes that benefit them in the months ahead. This is where I have grave concerns.

Fiscal Reality

In every statistical analysis from either side of the aisle of proposed tax reform that I have reviewed, whether it be from the Trump administration or the Republican leadership, I see no meaningful tax cuts for the middle class. In some cases, taxes increase for single parents with dependent children and married couples with at least three children. The vast majority of the tax relief goes to the wealthiest households and corporations. Irrespective of whether this is good policy or not, today's consumer confidence numbers will likely plummet if this is the fiscal reality.

Furthermore, it is impossible to provide "great healthcare" that covers everyone for less cost.

My suspicion is that the replacement plan will offer access to great healthcare if you can afford it. A family of five with $50,000 in household income which is currently covered by the Affordable Care Act is probably receiving a subsidy that covers 80% of the premium charged by the healthcare provider. If these subsidies are eliminated or reduced, it will serve as a tax increase on those middle-income households that choose to retain their insurance. Irrespective of whether this is sound policy or not, it will be a rude awakening for the millions of lower-to-middle income households that are expecting to have "great healthcare" at a lower cost.

This is not about politics. It is about a gargantuan disconnect between investor sentiment, the consumer confidence that this sentiment is partly based upon and the economic reality that the majority of middle-class American households face moving forward. We just learned this morning that the rate of year-over-year wage growth in January declined from 2.8% to 2.5%.

In two weeks we will likely learn that inflation-adjusted wages are now declining even further. I don't see current tax or healthcare reform remedying this situation.

Market Implications

If you believe that the success of the overall economy is dependent on a rising tide that lifts most boats, then you can see that we may have a problem. Corporate revenues and profits are largely dependent on the rate of US economic growth, and this will be even more pronounced under the new administration's trade policies. The rate of economic growth is largely dependent on consumer spending. That spending is fueled by income growth. If the majority of the benefits of tax reform go to corporations and wealthy households, that money will be saved, invested or used to repurchase stock and pay dividends. This does not spur economic activity.

Furthermore, the Affordable Care Act may have been a disaster in the making, but it was a form of fiscal stimulus. Any replacement that reduces existing benefits will serve as a form of fiscal restraint, slowing the rate of economic growth. It will be particularly painful for the millions of households that lose their benefits or are forced to pay more for what they have now.

So who is the fool? Or better yet, who is being fooled? My fear is that it is the typical middle-income household, expecting as dramatic an improvement in its economic situation as current confidence measures indicate. If that is so, then investors are also being fooled, because they are investing on the basis that this confidence will translate into much faster rates of economic growth and corporate profitability.

The administration has its sights set on checkmating Tehran’s ambitions across the region. Iran’s proxies in Yemen are in the crosshairs.

By Dan De Luce

The Trump White House has begun stepping up action against Iranian-backed rebels in Yemen, part of a broader plan to counter Tehran by targeting its allies in the impoverished Gulf state.On Thursday, the United States diverted a destroyer to the Yemeni coast to protect shipping from Iranian-backed rebels, and is weighing tougher steps including drone strikes and deploying military advisers to assist local forces, according to officials familiar with the discussions.“There’s a desire to look at a very aggressive pushback” against Iran in Yemen within the administration, a source advising the Trump national security team said. Given the public rhetoric and private deliberations in the White House, the United States could “become more directly involved in trying to fight the Houthis” alongside Saudi and Emirati allies, said the source, who asked not to be named as he had not been authorized by the White House to comment.President Donald Trump’s aides see Yemen as an important battleground to signal U.S. resolve against Iran and to break with what they consider the previous administration’s failure to confront Tehran’s growing power in the region. But the tough approach carries the risk of triggering Iranian retaliation against the United States in Iraq and Syria, or even a full-blown war with Iran.On Friday, national security advisor Michael Flynn released a statement accusing the international community of having been “too tolerant of Iran’s bad behavior,” adding “the Trump Administration will no longer tolerate Iran’s provocations that threaten our interests.” In the first visible response to Monday’s attack on a Saudi frigate by Houthi suicide boats, the USS Cole, a guided missile destroyer, was ordered away from a “routine mission” in the Persian Gulf late Thursday and sent to the Bab al-Mandab Strait, a Pentagon official told FP. The Cole is the same warship hit by a lethal Qaeda suicide bombing in 2000 in the Yemen port of Aden, which left 17 sailors dead.The U.S. destroyer will escort vessels passing the Yemeni coastline and into the Red Sea said the official, who asked for anonymity to speak about the movement of the ship. The area saw Houthi missile attacks on a U.S. destroyer in January that fell short, and a direct hit on a United Arab Emirates vessel in October. Additionally, on Friday, the administration slapped a new round of sanctions on Iranian businesses, backing up a stream of threats and condemnations it issued in response to Iran’s recent ballistic missile test.To counter Iran’s proxies in Yemen, the administration is considering ramping up drone strikes, deploying more military advisors and carrying out more commando raids, the administration advisor and Republican congressional staffers said. The review also includes possibly expediting approval for military strikes against militants in Yemen — which required high level deliberations under the Obama administration — and expanding efforts to block Iranian arms deliveries to the Houthi forces.Having campaigned on a get-tough policy toward Iran, Trump’s first test came over the weekend, when Iran conducted a ballistic missile test, followed by the Houthi boat attack. Those moves are reinforcing Flynn’s already-hawkish instincts toward Iran, the adviser said.“Flynn wants to very strongly counter Iranian efforts” throughout the Middle East, but questions remain over the timing and the details of any stepped up U.S. role in Yemen or elsewhere, the advisor said.

The new round of sanctions target Iranian individuals and companies involved in Tehran’s missile program, some of whom are based in the United Arab Emirates, Lebanon and China. The sanctions handed down Friday would not violate the nuclear agreement between Iran and major powers, but were widely viewed as a first step in a series of measures by the Treasury Department designed to squeeze Iran and discourage foreign investment. The 2015 nuclear agreement imposed limits on Tehran’s nuclear program in exchange for lifting international sanctions. Washington has already played a role in the Yemeni civil war, supporting the Saudi-led bombing campaign against Houthi rebels for the past two years, providing hundreds of aerial refueling flights and drone surveillance missions to identify targets. The Pentagon curtailed some of its intelligence assistance last year, after Saudi Arabia drew international condemnation for the killing of scores of civilians during poorly planned airstrikes.

Former president Barack Obama’s administration long played down the scale of Iran’s assistance to the rebels in Yemen and did not portray Tehran’s activity as a major security threat. Instead, the previous administration placed a higher priority on targeting al Qaeda’s affiliate in Yemen, which intelligence agencies have long described as the most capable in the terror network.

In a series of stern warnings to Iran that continued through Friday, Trump and Flynn — with backing from congressional Republicans — vowed a tougher stance to counter Iranian missile programs and Tehran’s continued support for the Houthis.

On Wednesday, Flynn strode into the White House briefing room to deliver the warning that the administration is “officially putting Iran on notice,” but refused to elaborate what might be under consideration. After meeting with Flynn on Friday, Sen. Bob Corker (R-Tenn.), chairman of the Senate Foreign Relations Committee, said there needed to be “a coordinated, multi-faceted effort to pushback against a range of illicit Iranian behavior” in Yemen and the Middle East.One worry inside the administration is that Iran will expand its support for the Houthi rebels if Yemen’s civil war continues to grind on without resolution, threatening neighboring Saudi Arabia and international shipping passing along the coast — one of the world’s key maritime choke points.But deeper military involvement in Yemen is risky. An assault by U.S. Navy SEALs and Emirati commandos on Saturday in central Yemen — meant to attack al Qaeda terrorists unaffiliated with Tehran — was the first known U.S.-led ground operation in Yemen since December 2014, and it underscored the dangers of sending in American forces in the chaotic country. One Navy SEAL died, as did an unknown number of civilians.“The raid may signal a growing U.S. interest in getting more involved clandestinely in Yemen,” though most likely in an advisory role, said Seth Jones, a former adviser to special operations forces and an expert on counter-terrorism. “There will be limited boots on the ground for direct action or drone strikes,” said Jones, a fellow at the RAND Corp. “I expect that most of it will be working with local partner forces on the ground.”But ramping up pressure against the Houthis could backfire, pouring more fuel on the civil war and pushing the rebels even deeper into Tehran’s orbit, said Katherine Zimmerman, an analyst at the American Enterprise Institute.The U.S. is “siding with the government that is seen as illegitimate to a majority of the population in northern Yemen,” Zimmerman said.

Justin
SpittlerWe haven’t been completely honest with you.For the past few months, we’ve been saying Corporate America is in a profits “recession.” We even showed you proof.Just look at the chart below. You can clearly see that corporate profits stopped growing in 2014.So what’s the problem?

• It turns out, the situation is much worse than we thought...

The chart above uses earnings per share (EPS) for companies in the S&P 500.This metric divides a company’s net income by its total number of shares. It’s an easy way to measure a company’s profitability. But it’s not perfect.You see, this chart uses earnings for the past 12 months. It’s rearward-looking. It doesn’t show where profits are headed.The good news is that there are other ways to measure the health of a company. We’ll show you how in today’s Dispatch.By the end of this issue, you’ll know how to forecast corporate profits better than 99% of investors. You’ll also see why the corporate profits recession is actually much worse than it appears.

• Corporate profit margins peaked six years ago…

Corporate profit margins measure how much money a company keeps after it pays its employees, lenders, and Uncle Sam. Unlike EPS, profit margins are usually expressed as a percentage.The higher the profit margin, the better.You can see in the chart below that corporate profit margins hit an all-time high in 2011. They’ve been falling ever since.That’s not a good sign…

• Profit margins are cyclical…

They go through ups and downs. You can clearly see this in the chart above.Profit margins usually increase when the economy is growing. When the economy slows, they shrink.Right now, profit margins aren’t just shrinking...they’re in a clear downtrend. This tells us that they should keep falling.But that’s not the only reason investors should be nervous about corporate profits.

• Jeremy Grantham thinks profit margins always revert to their mean…

Grantham is one of the world’s most respected value investors. He’s the co-founder and chief investment strategist at Grantham, Mayo, Van Otterloo & Co., an investment firm that manages about $80 billion.In 2014, Grantham explained why it’s so important to watch profit margins:Profit margins are probably the most mean-reverting series in finance, and if profit margins do not mean-revert, then something has gone badly wrong with capitalism. If high profits do not attract competition, there is something wrong with the system and it is not functioning properly.If you’ve never heard of mean reversion, don’t worry. It’s simple. It basically means “what goes up, must come down,” and vice versa.

• If corporate profits keep falling, we could have big problems on our hands…

Below you’ll find the same chart we showed you earlier. The only difference is that we’ve shaded the periods where the U.S. was in an economic recession.You can see that corporate profit margins have fallen before almost every U.S. recession since the 1940s.But that’s not all.Right now, corporate profit margins are still well above their historical average. In order for them to revert to their mean, they would have to fall to 9%.You can see what happened the last time profit margins sunk that low. The U.S. economy entered its worst economic downturn since the Great Depression.

• To be clear, we aren’t saying profit margins will crash this quarter or even the next…

But history tells us they’re heading lower.It may take a year or longer, but a recession is coming.The good news is that we still have time to prepare. The easiest way to protect your wealth from a recession or financial crisis is to own gold.As we often point out, gold is real money. It’s preserved wealth for centuries. It’s survived every financial crisis known to man. You can’t say the same thing about paper money.This is why we encourage every investor to put 10% to 15% of their wealth in physical gold. Once you own enough gold for safety, you can think about speculating on gold for profit.

• Gold stocks are the best way to cash in on higher gold prices…

Gold stocks are leveraged to the price of gold.The problem is that most investors don’t know anything about gold miners. They analyze them like any other blue-chip stock. But gold miners aren’t like other companies.Many aren’t profitable. Some haven’t made their first sale yet. Others haven’t even found any gold.To make big money in gold stocks, you have to know what to look for.And Louis James does. Louis, as you may know, is our top gold analyst and a true industry insider. He understands the geology. He knows the smartest gold CEOs in the game. And he’s visited mines around the world.He recently got back from the richest gold deposit he’s ever seen. There, he saw gold veins as thick as his thigh. That’s unheard of.

Chart of the Day

One of Louis’ top gold stocks just doubled overnight.Today’s chart shows the performance of Aurion Resources (AU.V) since July. Louis recommended it in November. At the time, the stock was trading for C$0.35.On Wednesday, that stock surged all the way up to C$1.30. That’s 271% higher than when Louis recommended it. On Wednesday, Louis told his readers to take profits.If you made a huge profit on Aurion, we'd love to hear from you. If you missed the boat, don’t worry. Louis has several stocks in his portfolio that could soon deliver even bigger gains.

Turkey’s policymakers have not learnt the lessons of past emerging-market crises

THE Syrian consulate in Istanbul’s elegant Nisantasi quarter is a busy spot. Men huddle outside in the cold, waiting for their turn to slip through the building’s ornate doors. The rest of the neighbourhood is, however, unusually subdued. A string of terrorist attacks in the city and an attempted coup in July, followed by a purge of suspected sympathisers, has dampened spirits. “After a bomb goes off, no one goes out. A week is lost,” says one shopkeeper.Besides war next door and terror at home, Turkey’s economy has been rocked by political upheaval farther afield: the lira has plummeted by over 15% against the dollar since America’s election on November 8th. Many tenants cannot now afford Nisantasi’s rents, often priced in foreign currency. Even the childhood home of Orhan Pamuk, Turkey’s best-known novelist (pictured), has a “for rent” sign on the door. Back in November, Turkey had a lot of company in its economic misery. Other emerging markets also reacted badly to America’s election result, prompting talk of a “Trump tantrum” to match the “taper tantrum” after May 2013, when America’s Federal Reserve began musing about reducing its pace of asset purchases.In recent weeks, however, the fortunes of emerging markets have parted ways. South Africa’s rand has recouped most of its post-election losses against the dollar. India’s and Indonesia’s currencies are both within 2% of their pre-Trump parities. Brazil’s real, which weakened by 8% against the greenback in the first few days after the election, is now stronger than it was before it. Only Mexico’s peso, still down by about 10%, has rivalled the lira’s decline.The markets may have concluded that Mr Trump’s policies, intended to put America first, will set some emerging economies further back than others. Consider four potential dangers: a stronger dollar; trade wars; immigration curbs; and a tax holiday that prompts American firms to repatriate foreign profits. Russia is greatly vulnerable to none of these risks, according to Nomura, a bank. Mexico is highly exposed to all of them. Other economies fall somewhere between the two (see table).

What about Turkey? At first glance, it would seem to have little to fear. It is not highly vulnerable to a trade war, the repatriation of profits or curbs on migrant workers. After a fiscal and financial crisis in 2001, Turkey has also repaired its public finances, reformed the banking system, tamed inflation and floated the lira.But although Turkey has learnt a lot from its past, it has learnt rather less from its peers. The experience of other emerging economies over the past 20 years shows that current-account deficits can be as treacherous as fiscal deficits. It also shows that financing such a gap with long-term foreign direct investment is better than relying on “hot money”. The record also suggests that if the money has to be hot, it is better that it take the form of equity, rather than debt. And if it has to be debt, better that it is denominated in the country’s own currency, not someone else’s.For all its strengths, Turkey has not abided by these rules of thumb. Its persistent current-account deficit (estimated to exceed 4% of GDP in 2016) has left it with short-term external debt amounting to over $100bn at the end of November (84% of which is denominated in foreign currencies). That is roughly equal to its entire stock of foreign-currency reserves (worth less than $98bn at the end of November). Mexico’s reserves, in contrast, are roughly twice its short-term external debt, according to the IMF.These external debts and deficits leave Turkey vulnerable to the withdrawal of foreign capital. To prevent it may require higher interest rates, but the central bank has so far tightened only tentatively. Instead of simply raising its “benchmark” rate—the one-week repo rate—it has stopped offering repo auctions altogether. That has forced banks to borrow at its higher overnight lending rate (which it raised by 0.75 percentage points on January 24th) or the even higher rates offered at its “late” liquidity window.To some economists, the lack of simplicity in the central bank’s policy suggests a lack of conviction. They worry that, despite its statutory independence, it is reluctant to antagonise Turkey’s increasingly powerful president, Recep Tayyip Erdogan, who has fulminated against the “interest-rate lobby” and demanded lower borrowing costs. Mr Erdogan would rather defend the currency by drawing on Turkey’s deep reserves of patriotism, urging Turks to convert their dollars into lira “if you love this country”. One barber told a local television station he would offer a free cut to anyone who converted $300.If neither central bankers nor barbers stop the lira’s fall, it may be Turkey’s creditors in line for a haircut. On January 27th Fitch, a ratings agency, cut Turkey’s foreign-currency credit rating to junk, citing the country’s exposure to foreign debt and the erosion of checks and balances on its president. The agency thinks more loans (especially to tourism and energy companies) may require restructuring, but it believes Turkey’s banks have enough capital to withstand “moderate shocks”.

The other risk posed by a falling currency is rising prices. Turkey has a long history of high inflation, forcing Mr Erdogan to remove six zeroes from the currency in 2005. (Some Turks still say “billion” when they mean “thousand”.) Historically, a 10% fall in the lira translates into a 1.5% rise in prices, which would further jeopardise the central bank’s efforts to bring inflation down from 8.5% to its target of 5%. Its own economists argue that the inflationary impact of a weak currency may be offset by the weak economy.They could be right. Next to the Syrian consulate is a brightly painted store (the “Pop-Up Shop”), offering nothing but consumer imports, from cereals to cosmetics, so the neighbourhood’s well-heeled residents may satisfy esoteric tastes acquired abroad. Its eclectic range includes Brut aftershave, Jack Daniel’s barbecue sauce, Tide detergent and peach-flavoured amino acids. The falling lira has pushed their costs up, but they have still been forced to cut their prices for the benefit of their financially straitened customers. The shop manager has written off 2017 as a lost year. “We’ve had enough,” his father complains, tugging the collar of his coat, a Turkish gesture roughly akin to throwing up your hands in exasperation. But at least their rent, which the father quotes in billions not thousands, is priced in lira.

If you know the other and know yourself, you need not fear the result of a hundred battles.

Sun Tzu

We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.